Trenton requests $21.2M from state

Trenton Mayor Tony Mack holds a press conference in his second floor conference room at City Hall on Wednesday, June 15, 2011. Martin Griff / The Times of Trenton

TRENTON — As officials wait to hear how much transitional aid the state will dole out to the struggling city this year, a look at Trenton’s aid application shows the city expects it will continue to need some form of special aid for the foreseeable future.

Trenton this year requested $21.2 million from the state transitional aid program set up in 2010, which gives funds to eligible cash-strapped municipalities on the condition that they show financial need and the ability to eventually wean themselves off the temporary aid dollars.

During an interview late last month, Trenton business administrator Sam Hutchinson said he had not yet been informed how much Trenton can expect to receive this year.

The city budgeted for $18.7 million in aid in its $186.4 million fiscal year 2013 budget introduced last month, down from the $22 million the city received last year. Even if Trenton receives the requested amount, city taxes are still expected to go up.

The state Department of Community Affairs — which oversees the program and, in the case of Trenton, retains broad oversight over city spending and hiring as a condition of the aid payment — is expected to make an announcement sometime around Nov. 20, Hutchinson said.

The Division of Local Government Services was continuing to review the fiscal year 2013 transitional aid applications, DCA spokeswoman Lisa Ryan said at the time.

The pot of transitional aid has shrunk year by year and DCA officials instructed cities and towns to expect about a 15 percent cut this year, Hutchinson has said.

But the application for aid also requires municipalities to draft a plan showing how they will eliminate their reliance on transitional aid over the next few years.

Trenton’s response? A gradual aid phase out over the next three budget years is “probably not doable.”

If the state’s transitional aid pool keeps decreasing as scheduled, transitional aid payments to the city would decline by $6 million annually through fiscal year 2016. To make up that money, the city would have to lay off more staff, cut more services or raise taxes over and over again. The city has already hiked taxes 17 percent in the last three years and cut staff by nearly one-third since 2010. Further cuts would diminish city services even further and force taxpayers to continue to accept huge tax increases.

“The annual shortfall will have to be offset by additional reductions in employees and services provided and/or significant increases in property taxes,” a copy of the city’s transitional aid application said. “It is highly unlikely that a significant increase in ratables is going to occur in the next few years. Based on the current status of the City budget, it is highly unlikely that the City of Trenton could achieve a phase-out of Transitional Aid over this period.”

The city last year unsuccessfully applied to make a portion of its transitional aid permanent, a request granted to five municipalities, including Camden and Asbury Park.

Camden received $61.4 million in transitional aid last year, $40 million of which was shifted into its annual Consolidated Municipal Property Tax Relief Act (CMPTRA) aid. In denying Trenton’s petition, DCA officials said they still wanted to see sound management in place in Trenton.

Hutchinson said the city is moving to strengthen its finances, but still needs some sort of contribution from the state.

“What we would like to do is work our way off transitional aid, which gives us the ability to have expenditures and personnel choices that the city controls without oversight from the state,” Hutchinson said.

“In order to do that we have to demonstrate, number one, capability to generate revenue and, number two, competence to manage those revenues. I think we’re moving in that direction.”

The transitional aid application notes that half of Trenton’s properties are tax-exempt, many of them state-owned. If the state paid its fair share in property taxes, payments to the city would increase by about $19 million — approximately the same amount of money the city requested this year. Before Christie cut the program, the city received a Capital City Aid allocation of $35 million, a special payment in lieu of taxes to compensate the city for tax-exempt state buildings.

Mayor Tony Mack, council members and local legislators have asked the state to pay more on its properties, but the pleas have gained little traction.